The 7 centres of gravity in mobile
[The first half of 2008 took the mobile industry by storm.. Nokia+Trolltech+Symbian, Android, BREW+Flash, Adobe Open Screen, LiMo devices.. As the dust settles, Research Director Andreas Constantinou looks at how the mobile landscape is shaping around 7 centres of gravity].
The first 6+ months of 2008 were the most turbulent in the entire history of the mobile industry. In November 2007 Google unveiled Android, in January 2008 Nokia announced the acquisition of Trolltech, in February 2008 LiMo announced the first compliant devices, in May 2008 Adobe announced the Open Screen Project, in May 2008 Qualcomm announced that BREW would be embedding Flash, in June 2008 Nokia announced the Symbian acquisition and in July 2008 Apple unveiled iPhone 3G and the AppStore.
As the dust is clearing after the storm, a new landscape is unveiling in the mobile industry; one where the balance of power is concentrating around 7 centres of gravity: Adobe, Apple, Google, LiMo, Microsoft, Nokia and Qualcomm. In other words, the industry is transitioning from a horizontal structure of operating system offerings circa 2002 to a vertical structure of complete offerings circa 2008 (as all industries do, based on the double-helix management theory).
The seven heavyweights share a common vision: to become the dominant way of building phone software and thus control how services are delivered onto mobile devices in the future. Their gravity pull means that they also influence a large part of the value chain making software vendors, handset OEMs and network operators dependent on them. There are two more common elements in these 7 forces: the move to use open source licensing so as to share software development costs and the formation of industry consortia to accelerate commercialisation efforts and reduce time-to-market.
The next diagram analyses the fundamentals, components and commercials of the 7 centres of gravity, and comes from our forthcoming research report on Android vs S60 (click to enlarge).
Google’s Android is in essence an application environment for opening 3rd party Java developers to access 100% of the operating system capabilities (see earlier analysis on the significance of Android). It is backed by the Open Handset Alliance, a closed consortium of technology and commercialisation partners. The UI customisation capabilities are also notable, offering system-wide customisation and extensibility of built-in controls. The open source license (as of version 1.0) and the zero royalty fees have been largely responsible for the cascade of announcements in 1H08. However, the real test of Android’s openness will be the security policy implementation that will be chosen by the handset OEMs as they balance developer openness with their liability exposure (imagine the irony.. open Android, closed handsets).
LiMo is a consortium led by mighty operators Vodafone and Orange who are seeking to commoditise the OS and facilitate deployment of their own services via rich clients and container programmes. However, LiMo has yet to prove its credibility; the 18 devices announced to be LiMo compliant should in effect have little in common. LiMo’s practical impact is in having lead integrators WindRiver, Azingo and Purple Labs provide a common-ish Linux-based stack to lead operator requirements and accelerate mobile Linux shipments.
Nokia‘s Symbian acquisition (see earlier analysis) marks the resurgence of the S60 licensing strategy, providing a means for Nokia to more easily deploy its Ovi umbrella of services to non-Nokia devices (and non-S60 devices thanks to Trolltech’s Qt). Nokia’s plan to use the open source EPL license for Symbian+S60 cements the impending commoditisation of the operating system.
BREW has been a complete vertical ecosystem since its foundation, thanks to Qualcomm’s foresight. The BREW application environment ships on about 1 in 10 of today’s mobile devices, making that more ubiquitous than S60 (see our 100m club analysis of shipments). However BREW is facing persistent challenges in expanding beyond its US and Japan strongholds and has been in the last year competing with Windows Mobile on its home turf (given that QCT chipsets also ship with Windows Mobile). Clearly BREW needs to continue out-innovating the other centres of gravity if it wants to stay ahead of the game – and the recent announcement of embedding Flash onto BREW should prove a step in this direction.
Apple is an industry wonder, and the only player to succesfully, single-handedly create a vertically integrated offering spanning from hardware to industrial design and services. The AppStore is the developer-go-to-market program that is the latest addition to its vertical offering.
Microsoft has been achieving a near-doubling of Windows Mobile shipments between 2007 and 2008. More importantly, it has loosened its restrictions on the UI customisation, enabling OEMs like HTC, Philips, nVidia and Sony Ericsson to replace the quintessential Start button with trully innovative UIs that matter to consumers. Microsoft’s Danger acquisition should also help the Redmond giant to spearhead its consumer push with innovative industrial designs from the designers of the innovative SideKick.
Last but not least, Adobe has been extremely succesful at penetrating the mobile industry, and will soon be claiming the position of the de facto application environment as Java has failed to achieve consistency of implementations. Adobe’s thinness of its offering (compared to the other centres of gravity – see chart) is balanced by the comprehensiveness and penetration of its developer tools.
As to the second half of 2008, I expect Microsoft to follow with a more open policy towards code sharing and contribution (in the footsteps of Symbian Foundation). And lots more announcements that the crystal ball is too hazy to reveal at this moment..